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European Commission Proposes Slovakia Joins Euro Area in 2009

Brussels - The European Commission concluded that Slovakia meets the criteria for adopting the Euro and made a proposal to the Council to this effect. The regular Convergence Report on euro readiness, adopted by the Commission, shows that the other nine countries with a so-called 'derogation' have made progress on the road to the single currency, but do not yet meet all the conditions for euro adoption.

The Council of EU finance ministers (ECOFIN) will take the final decision on the adoption of the euro in Slovakia in July, after Parliament has given its opinion and EU heads of state and government have discussed the subject at their summit meeting in June.

"Slovakia has achieved a high degree of sustainable economic convergence and is ready to adopt the euro on 1 January 2009. However, to ensure that the adoption of the euro is a success, Slovakia must pursue its efforts to maintain a low-inflation environment, be more ambitious with regard to budgetary consolidation and strengthen its competitiveness position. It must also now speed up its practical preparations to ensure that the changeover takes place smoothly, as it did in Cyprus and Malta in January 2008," said Joaquín Almunia, EU Commissioner for Economic and Monetary Affairs.

The Commission adopted its regular Convergence Report assessing progress made by the ten EU countries 'with a derogation' (Bulgaria, the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Romania, Slovakia and Sweden) towards adoption of the euro. EU countries that do not meet the Maastricht convergence criteria for the euro are said to have a 'derogation'. The criteria consist of four stability-oriented economic conditions regarding the government budgetary position, price stability, exchange rate stability and convergence of long-term interest rates. The national legislation on monetary affairs must also be in line with the EU Treaty.

According to the Treaty, the Commission reports every two years on the subject. Member States concerned can request that their readiness be assessed at any other moment. Slovakia recently made such a request although the Convergence Report was already being prepared.